How to Start a New Practice

In previous issues of this series on “How to Start a Practice,” I explained the importance of picking a “hot state”. A “hot state” enables a DC to earn four times the income as a DC practicing in a “cold state.” Next, I explained the importance of picking a “hot town” in which to practice. A “hot town” also enables a DC to earn four times the income of another DC doing the same amount of work in a “cold town.”

You may have noted that the picking of a “hot state” entailed very little demographics, in comparison to the picking of a “hot town.” In this issue of “How to Start a Practice,” I offer you guidance on how to pick a “hot” office location. The picking of a “hot location” involves an extensive amount of vital demographic and psychographic studies. Without these studies, odds are you will pick a poor location that can end in practice failure for you. So, the importance of demographics and psychographics studies will become quite evident.

Demographics and Psychographics

Ask any successful businessman and they’ll tell you that the three major factors in any business’ success are “location, location, location.” The same is true for a chiropractic practice. But, how do you find that great “location”? The answer is a great demographic and psychographic analysis of your chosen town. These analyses allow you to pinpoint that area of a town with the highest concentration of potential patients—people who will support your practice specialization. While demographic and psychographic analysis may not always find the perfect location, these studies can act as a “safety net,” steering the start-up doctor away from a poor choice that could spell disaster.

The Difference between Demographics and Psychographics Analysis

A demographic analysis is the study of numbers, ratios, percentages, etc. A psychographic analysis is the study of the patterns or trends that underlie a complex set of data. For example: the people who are receiving chiropractic care, or the people who don’t and won’t go to a chiropractor. An excellent example of psychographics is the infamous defeat of the world’s best chess player—by an IBM computer! The computer didn’t use demographics. It used psychographics. It analyzed the moves the human player would make and won.

The hotter the practice location, the better the DC will do in practice. The factors that differentiate between a “freezing cold,” “cold,” “lukewarm,” “hot,” and “extremely hot” location are found in proper demographic and psychographic studies.

How Does Big Businesses Find

Successful Locations?

Major businesses, retailers, food chains like McDonalds, Red Lobster, Olive Garden, Blockbuster, etc., are extremely successful because their demographic and psychographic studies enable them to find profitable locations. These successful businesses never establish their locations on a hunch or strictly personal preference. Neither should a doctor starting a practice. McDonalds knows their site selection can spell the difference between success and failure. Is a doctor’s future any less important than a hamburger stand?

Bankers use demographics to determine locations for their satellite branches. Dozens of bank officials who have dealt with my start-up clients have personally visited my office. The thing that impressed these bankers the most was the thoroughness and uniqueness of my demographic and psychographic studies. These bankers knew the right versus wrong location could mean the difference between a thriving new practice, and one that will have to struggle to survive or fail. Once these bankers witnessed my methods of analysis, they knew my clients had a distinct advantage over their competitors.

How Does the Average Chiropractor Pick an Office Location?

Often a DC simply drives down a street, sees an office for lease and, if the price is low enough, leases it. Other DC’s make their selections solely on the basis of where the office site is. They pick an office site that’s convenient to where they want to live and in an area that they personally like the “feel of.” Unfortunately, demographic or psychographic studies are not considered. These DC’s are flying in the face of failure. And statistics tell us a significant percentage of them simply won’t survive.

Choosing a “hot location” can mean up to 150 additional new patients per year, every year of the doctor’s professional life in that location (150 x $1000 per patient = $150,000 a year). This is often the difference between practice success and failure. An expertly picked location should bring in enough patients to at least pay for the doctor’s office lease and utilities payment.

Not initiating demographic and psychographic research to determine “hot towns” and “hot locations,” is one of the major reasons that an estimated 40 to 50 percent of doctors starting a practice fail. The amount of time and effort a doctor puts into finding a “hot practice location” will pay the largest dividends of any other investment—in his or her life. The demographic and psychographic process of finding the right location is so very crucial, that no matter how long it takes, it is worth it. A poor location is the worst mistake a new practitioner can make. It may doom even the best practitioner to failure. Business experts Dunn and Bradstreet report that the number one reason a new business fails is lack of a “market.” Demographics and psychographics will tell you whether or not you have a viable market.

As a practice consultant who specializes in starting practices, I assure you that most of the decisions that dictate the success or failure of a new practice are made prior to opening the practice.

What Should You Do?

How do most doctors perform demographics and psychographics research? Frankly, unless they have a consultant, they don’t. These studies are way beyond a doctor’s area of expertise. A DC’s training is in chiropractic, not demographic and psychographic analysis and site selection.

The most important advice I can give the reader concerning demographics and psychographics is to get help, either from a consultant who specializes in practice start-ups or from other professionals in this field. I’m not suggesting you can’t learn the ins and outs of demographics and psychographics. Sure you can. But why afford the time and money to do so, when experts with valuable “hands on” experience are available for hire? A good office location is one of the biggest patient attractors there is. Do it right; hire it done!

I know a doctor who picked a location directly across from the state fairgrounds. Except for two weeks a year, when the state had a fair, there was almost nobody around. When the state did have a fair, his patients couldn’t or wouldn’t go through the congested traffic to get to his office. His practice folded.

Another doctor attracted by low rent payments located his office on a side street, in the back of a strip center with no signage. People didn’t know he existed. He folded.

I’ve even seen a chiropractor open his practice on the wrong side of a one-way street in the middle of a residential neighborhood with no parking. The few patients he attracted had to park in the residential neighborhood only to have the police tow their cars away.

In the next issue of this “How to Start a Practice” series, I’ll discuss a do-it-yourself method of finding a “hot” office location.

Dr. Peter G. Fernandez is a world authority on starting a practice. He has thirty year experience in starting new practices, has written four books and numerous articles on the subject and has consulted in the opening of over 3,000 new practices. Contact Dr. Fernandez at 10733 57th Avenue North, Seminole, Florida, 33772; Phone: 727-392-0822, 1-800-882-4476; Fax 727-392-0489; or visit

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